A recent CommBank survey found that nearly 80% of Australian small and medium-sized enterprises (SMEs) faced cash flow challenges in 2024. This statistic highlights a harsh reality for many business owners—keeping cash flow steady is easier said than done.
Without access to quick capital, businesses may find themselves in a tough spot, struggling to seize new opportunities or even meet basic expenses. Here are the five ways you can give your cash flow a boost.
Send Out Invoices Quickly
If you delay sending out an invoice, you delay getting your cash. This can lead to a trickle down effect where your cash flow starts to slow.
You should make effortless invoicing a priority to your business. Automated tools from the likes of QuickBooks and Xero can send, track, and chase up payments so you don’t have to plan your day around following up overdues.
Not only does this make it easier for you to manage your invoicing, but it also makes it easier for the client to pay their invoices.
The faster you send out invoices, the faster you get paid. Don’t delay your invoices and always be very clear on payment due dates, fees, and accepted payment methods.
Cut Costs Whenever Possible
Don’t waste money for the sake of it, every dollar adds up. Unused or rarely used subscriptions or unnecessary overheads build up over the year, so make sure you identify them and make cuts.
Make sure you conduct a thorough audit on your finances and look to renegotiate any supplier contracts. Additionally, consider using free or low cost accounting software and tools. This will cut the time you spend manually tracking your accounts, or potentially reduce the spend you already have on more expensive software.
Use Technology to Track Cash Flow
No one enjoys manually tracking cash flow. Jumping in and out of spreadsheets to monitor cash flow can lead to headaches and errors.
However, with the right tools you can easily track your income and expenses. Make sure you find software that gives you:
- Cash flow forecasting so you’re prepared for shortfalls
- Automated alerts so you’re across low balances
- Expense tracking that helps you highlight unnecessary expenses
Leverage Short-Term Financing
Regardless of how well you run your business, you might need to plug a few cash flow gaps. That being said, short term business financing isn’t just for keeping your business running, it can also be there to shore up your marketing campaigns in the off season so you can go even harder in your peak season.
The most common forms of short-term business financing are:
1. Invoice Financing
Waiting on unpaid invoices? Invoice financing allows you to access cash immediately by selling outstanding invoices to a lender. This is a great option for businesses dealing with slow-paying clients, ensuring you maintain steady cash flow without waiting weeks or months for payments.
2. Business Line of Credit
A business line of credit provides flexibility when you need it most. Instead of taking out a lump sum loan, you can draw funds as needed and only pay interest on what you use. This option works well for covering unexpected expenses or managing seasonal fluctuations.
TL;DR
Keeping your cash flow steady is essential for business success. If you’re struggling with late payments, rising costs, or seasonal slowdowns, here are five key strategies to help:
- Send out invoices quickly The faster you invoice, the faster you get paid. Use automated tools to send, track, and follow up on payments effortlessly.
- Cut unnecessary costs Audit your expenses, cancel unused subscriptions, and renegotiate supplier contracts to save money.
- Use technology to track cash flow Cash flow forecasting, automated alerts, and expense tracking software can help you stay ahead of financial shortfalls.
- Leverage short-term financing When needed, financing options like invoice financing, a business line of credit, or a merchant cash advance can provide quick access to capital.
